Cambodian solar panel exports face an unheard-of over 3,500 percent US tariffs

Cambodian solar panel exports face an unheard-of over 3,500 percent US tariffs

Solar products from Cambodia face unprecedented duties of more than 3,500 percent, said a release from the US Department of Commerce, on Monday.

The US trade officials finalised steep tariff levels on most solar cells from Southeast Asia as part of a key step towards wrapping up a year-old trade case in which American manufacturers accused Chinese companies of flooding the market with unfairly cheap goods.

Products from Cambodia, in particular, would now incur levies of more than 3,500 percent because its manufacturers chose not to collaborate with an investigation by the US Department of Commerce, said the compliance repository of the US Department of Commerce.

The case gathered momentum during the tenure of former US president Joe Biden after South Korea’s Hanwha Qcells and Arizona-based First Solar Inc and several smaller producers came forward to protect billions of dollars in investments in US solar manufacturing.

The petitioner consortium, the American Alliance for Solar Manufacturing Trade Committee, accused big Chinese solar panel makers with factories in Cambodia, Malaysia, Thailand and Vietnam of shipping panels priced below their cost of production and of receiving unfair subsidies, making American goods uncompetitive.

The report emphasised that the tariffs unveiled may vary widely depending on the company and country, but were broadly higher than the preliminary duties announced late last year.

Combined dumping and countervailing duties on Jinko Solar products from Malaysia were among the lowest at 41.56 percent, while rival Trina Solar’s products from its operations in Thailand face tariffs of 375.19 percent, a Reuters report pointed out.

In general, Vietnamese solar panel manufacturing companies will be hit with a 395.9 percent tariff, while Thai manufacturers are facing 375.2 percent. Malaysia’s nationwide rate has been set at just 34.4 percent. The tariffs on Cambodian solar panels remains the highest at 3,521 percent.

The record tariffs, however, still depend on the decision by International Trade Commission, a separate US agency, which has until June 2, 2025, to make its final injury determination before the Department of Commerce enforces the duties.

“These are very strong results,” Tim Brightbill, an attorney for the US manufacturing group, was quoted in the report.

“We are confident that they will address the unfair trade practices of the Chinese-owned companies in these four countries, which have been injuring the US solar manufacturing industry for far too long.”

The threat of tariffs on countries that supplied more than $10 billion of solar products to the US last year, accounting for the vast majority of domestic supplies, has caused a dramatic shift in the global solar trade, the report observed.

Speaking to Khmer Times, a renewable energy and electrical engineering expert based in Phnom Penh, said there are no subsidiaries of top Chinese solar panel manufacturers functioning in Cambodia.

“There could be integrators and assemblers from China in the solar panel manufacturing sector, but that doesn’t mean that the entire business is Chinese-owned.

“However, in other Asean countries such as Malaysia or Vietnam, many Chinese solar top-tier manufacturers have operations and functional branches.”

In 2023, the US imported almost $12 billion in solar equipment from the four countries, according to US Census Bureau figures.

While the planned tariffs are likely to help US solar panel manufacturers, they could also mean extra costs for businesses and consumers who have benefited from the availability of cheaper solar products, reported BBC yesterday.

The Kingdom’s solar panel exports witnessed a sharp decline to approximately $830 million last year from over $2 billion in 2023 after the Biden administration initiated measures to stop the preferential treatment.

According to Asean+3 Macroresearch Organisation (AMRO), Cambodia can diversify its export destinations from the US to developing economies, such as those in the Middle East or Africa, which are transiting to greater use of renewable energy with regard to its solar panel industry.

“Cambodia’s low labour cost remains a major source of competitiveness. Furthermore, the country’s high level of dollarisation minimises currency mismatch risks for foreign investors. Given the lack of strict capital control policies, foreign investors can freely move their money in and out of the country, increasing their confidence in the economy.”

khmertimeskh